Personal Loans

Payday loan alternatives

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As we discussed yesterday on CreditBloggers, the upcoming holiday season can be very expensive. If you are feeling the holiday spending pinch, you may think about using a payday loan to get extra cash. Payday loan companies advertise cheap and easy access to emergency cash but the costs are very high. The APR on a payday loan is usually in the 500% range and can go as high as 5,000%. Instead of helping you with your financial issues, payday loans often exacerbate the problem and leave you deeper in debt. If you are facing a financial crunch this fall, consider these alternatives to payday loans:

  • Borrow money from your savings account
  • Ask a relative to lend you the money
  • Apply for a traditional small loan
  • Ask your creditor for more time to pay a bill
  • Use a cash advance on your credit card
  • Negotiate a payment plan with the creditor
  • Charge the amount to your credit card
  • Receive an advance from your employer
  • Use your bank’s overdraft protections
  • Obtain a line of credit from an FDIC approved lender

If you have evaluated all of your options and decide a payday loan is right for you, be sure to understand all the costs and terms before you apply.

  • Shop around for a trusted payday lender that offers lower rates and fees.
  • Borrow only as much as you know you can pay back with your next paycheck.
  • When you get paid, your first priority should be to pay back the loan immediately.

You can read more information about payday lending in this article: The Truth About Payday Loans

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